Airlines, tour operators worry about tourism slowdown

BANGKOK • Asia's airlines, tour agents and cruise operators are on the alert for a tourism slowdown in Thailand, where partying and drinking alcohol in public are off limits following the death of King Bhumibol Adulyadej.

The government called on the country to avoid "joyful events" for 30 days and to dress in mourning for a year. Travel companies across the region say they are now trying to grasp the potential consequences for their businesses.

Japan Airlines and Hana Tour Service, South Korea's biggest tour operator, expect a dip in demand during the mourning period, while representatives for Korean Air Lines, Asiana Airlines and Jetstar, which is owned by Qantas Airways, said they are monitoring the situation.

"In the short term, we could possibly get some weak data and I'm sure tourist arrivals will be affected," Mr Sean Darby, chief global equity strategist at Jefferies Group, told Bloomberg TV in Hong Kong, adding that he does not see any dramatic changes to policy.

"There's going to be a knock-on effect generally from the industry slowing down" but short-term outflows will be "easily managed by the authorities", he said.

While it is too early to gauge the immediate impact on tourism, any alcohol restrictions and 12 months of mourning may make Thai resorts less attractive for some vacationers.

Thailand has long been a favourite destination for European and Asian holidaymakers, who are drawn to Bangkok's nightlife and southwest island resorts such as Phuket. 

Thailand's economy has come under strain in recent years given weak global demand, a slowdown in private investment and inflation near zero per cent. Tourism, one of the bright spots fuelled by visitors from China, accounts for at least 10 per cent of the country's gross domestic product. That has helped the South-east Asian nation boost foreign-currency reserves and run up one of the highest current-account surpluses among emerging markets.

The country attracted 7.9 million visitors from China last year, a 70 per cent increase from 2014, and posted a quarterly record for Chinese visitors again in the three months to March this year.

Some companies saw little impact from the King's death. No tours have been called off so far, said Mr Steve Huen, executive director of Hong Kong-based travel agency EGL Tours. And even if some shows like concerts are cancelled, there is flexibility to change trip schedules, he said.

Mr Hamzah Rahmat, president of the Malaysian Association of Tours & Travel Agents in Kuala Lumpur, said he had not received any reports of cancellations and saw no reason to alter itineraries.

"Life has to go on, and I think business also has to go on," he said.


A version of this article appeared in the print edition of The Straits Times on October 15, 2016, with the headline 'Airlines, tour operators worry about tourism slowdown'. Print Edition | Subscribe